Another eye-opening story from Chris Rizo at the Chamber's Legal NewsLine: the litigation lobby is quietly preparing to push through a $1.6 billion (with a "b") tax break for contingent-fee lawyers that would let them deduct expenses as made, rather than in the year of settling a suit. AAJ lobbyist Linda Lipsen says Sens. Harry Reid and Max Baucus and Reps. Nancy Pelosi and Charles Rangel are among those on board, as well as "some Republicans", but "the problem is there is not a tax vehicle yet," -- "You cannot have a stand alone bill to help lawyers ... so we have to tuck it into something."

Treating these pseudo-loans as business expenses the moment they're made is effectively an admission that the lawyer doesn't expect to be repaid. If a bank loans you $1 million to buy a house, you don't see them lobbying to make it a tax-deductible business expense, because it's a bona fide loan they expect to get back.

[Addressing another commenter:] ... the fact that the loans are tax-deductible if they are not repaid is not indicative of some special tax treatment that already exists; it simply means that they can be written off like any bad debt. But you don't get to write off bad debt until you actually know it's bad!